How to Start an Estate Sale Company

Part 1 - How to start an Estate Sale Company business - Background

Starting an estate sale company can be an exciting and rewarding business venture for entrepreneurs who want to create a dynamic, customer-focused business.

Having said that, you should keep in mind that launching a successful estate sale company requires careful planning, significant experience, and a wide range of skills.

In this comprehensive guide, we’ll walk you through all the essential steps you’ll need to take to start your own estate sale company, from conducting market research and purchasing the necessary equipment to obtaining licenses, setting up operations, and attracting customers.

Our guide is in 3 parts:

• Part 1 - How to start an Estate Sale business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

Industry Overview

The estate sales industry is a niche but steady sector that’s primarily driven by life transitions such as downsizing, relocations, and estate liquidations after a death. Due to a growing aging population and increased interest in secondhand goods, the industry has experienced consistent growth, with an expected CAGR of 2.1% throughout 2024.

This growth is expected to lead to the industry’s total market size reaching $230 million by the end of the year. Furthermore, competition remains localized since companies focus on regional markets, while demand is largely shaped by economic conditions and housing trends.

Despite this increase in revenue, estate sale companies are keeping less of their revenue as profit due to rising operational costs. In fact, profit has decreased from 17.2% of the money earned in 2018 to an estimated 11.7%, though the industry still remains attractive due to its relatively low barriers to entry.

Startup Costs

If you’re considering whether an estate sale company is right for you, the first thing you’ll need to know is whether it’s a) affordable, and b) worth the investment. I mean, how much can you actually make running your own estate sale company?

Well, it depends. The initial investment for an estate sale company varies widely based on factors such as your business’s size, the type of equipment it needs, and the specialty of the services it offers:

• Marketing and promotion is likely to be one of the biggest initial expenses when initially starting out. Expect to spend anywhere from $200 to $1,000 on advertising for your first sale — which could be used on things like online ads, social media promotion, or printed materials (e.g., flyers and signs). These costs vary depending on how aggressive you want to be with your marketing efforts and will increase if you opt to include a professional website and logo design.
• Licensing and insurance is another significant area of expense that you’ll need to budget for. Getting fully licensed and insured can easily cost between $500 and $1,500, though this estimation can vary widely depending on your location. While business licenses typically involve a one-time fee ranging between $50 and $500, general liability insurance can cost anywhere between $500 and $1,000 annually.
• Office space and equipment is another important cost to bear in mind when starting up your estate sale business — while estate sale companies can start with a home office, many soon realize that they need additional workspace or storage. Renting a small office or storage unit for your business could cost anywhere from $500 to $1,500 per month, though larger commercial offices will cost far more. You’ll also need basic supplies such as a point of sale (POS) system, pricing tags, markers, and display tables, which can run between $100 and $500.

In total, your initial startup investment can range widely depending on how you set up your business, but with careful planning, you should be able to start with an investment well under $10,000.

Earning Potential

As an estate sale company owner, your clients will generally be individuals who need to liquidate the contents of a home or business. Common clients include heirs of a deceased parent, individuals going through a divorce, people facing financial burdens, or those downsizing after the death of a spouse — which are often referred to as the “four D’s”: Death, Divorce, Debt, and Downsizing.

Most estate sale companies earn their income by charging a percentage of the total gross sales from the estate, typically between 25% and 50%. This percentage usually covers all your services, including appraising items, pricing them, promoting the sale, staging the event, managing buyers, and conducting post-sale cleanup.

A smaller estate might have a lower commission rate, while a larger, more valuable estate could justify a higher percentage. Be sure to research what other estate sale companies in your area charge to ensure that your pricing is competitive.

To increase profitability, many estate sale companies offer additional services (e.g., cleaning and donation coordination, packing, or trash removal) for estates that don’t warrant a full sale. Additionally, specializing in high-end estates with valuable assets such as fine art, antiques, or jewelry can allow you to command higher commissions.

However, this requires specialized knowledge and training in appraisals, as well as building a network of valuable contacts such as probate attorneys or collectors who can refer you to clients with larger estates.

How to Start an Estate Sale Company FAQs

What are the costs involved in opening an estate sale company?

It could take a while for your sales commissions to catch up with your startup costs. You might have to hire a part-time employee and run ads for your first estate sale before you start to see a payoff on that first event.

There might also be additional marketing costs, as well as the expenses of meeting all licensing and permit requirements, which will vary depending on where you’re doing business, as well as bonding and insurance costs.

In total, you should be able to start your estate sales company with less than $10,000.

Who is the target market?

Your clients will be individuals who wish to liquidate most or all of the contents of a home or business. This could include the heir to an estate of a recently deceased parent or a homeowner who wishes to quickly downsize due to increased financial burdens, or even a couple going through a divorce.

In fact, the industry mantra is that the clientele comes from the four D’s: Death, Divorce, Debt, and Downsizing.

How does an estate sale company make money?

Your compensation will usually be derived as a percentage of total gross sales, ranging from about 25% to 50%.

If the estate is small, your compensation might also be based on fees for marketing the sale, staging the event, cleanup or other elements of the assignment.

How can you make your business more profitable?

There are ancillary services you can offer along with — or instead of — an estate sale. These can range from cleanup and donation services when the size of the estate doesn’t warrant a sale to packing and trash hauling. Some business owners provide liquidation consultative services to larger estates.

Furthermore, if you have the proper training to be able to appraise valuable art, antiques, fine jewelry and collectibles, you can specialize in handling only the largest estates, with the highest commissions.

Part 2 - Is an Estate Sale Company business the right fit for you?

Part 3 - Action plan to launch your Estate Sale Company business in 90 days